Rural Phone Project Stinks

It is just as well that President Estrada ordered the shelving of the rural telephone program. As it is right now, it is a scandal that will haunt the Ramos administration. Some of Erap's boys tried to get into the act before the program lapses on Feb. 8. The timely order of Erap protects him from being tainted by a scandal that could exceed the magnitude of the Centennial scam.

The Municipal Telephone Program was designed to provide calling stations in remote barangays. That looks alright at face value, except that they made it look like they are dealing with a crisis with the gravity of the power crisis, which is hardly the case. They exempted it from public bidding. They negotiated contracts with the least amount of transparency.

The result is a shameless raid on the public treasury with costs as much as 30 times what private phone companies spend to put out lines. What is worse, Sen. Serge Osmeña points out, the project uses an old Marcos law to circumvent the need to have this large appropriation of public funds go through Congressional scrutiny. Here is Congress bleeding to cut some P20 billion from the national budget and here is a program that binds the government to pay P43 billion without public bidding much less congressional deliberation.

The program, originally tagged at P100 billion, is financed by supplier and bank credit guaranteed by the Republic. As such, funds to pay the loans will be automatically appropriated year after year, as provided for in the Marcos decree. That's like giving our officials a blank check to do as they please with our money without congressional check and balance. Some P43-billion worth of contracts had been signed as of today, mostly by the Ramos administration.

Just to provide a flavor of this raid on the National Treasury, let's take a look at just three contracts. A contract with SRT signed on Oct. 9, 1997 costs $18,998.64 a line for a total cost of $99,362,906 for 1,046 barangays at five lines per barangay. Cost per barangay is $94,993.22.

On Oct. 25, 1999, the current administration renegotiated the contract and for the same $99.3-million contract price, will now cover 2,227 barangays at 10 lines per barangay. The cost per barangay was halved to $44,617.38 and the cost per line pared down to $4,462 per line from the $18,998 per line as signed by the Ramos administration. While the current DOTC administration is to be lauded for bringing down the costs, the $4,462 per line is still way up the $1,000 to $1,500 it costs the private sector to put up such lines.

The next contract is with Lucent, signed Jan. 14, 1998. Total project cost was in Swiss Francs with the Peso equivalent of P357,427,464 for 444 barangays at five lines per barangay. Cost per barangay is $101,280.57 or an astounding $20,256.11 per line.

The Lucent contract was renegotiated on Dec. 22, 1999 and for the same contract price, will now cover 754 barangays at 10 instead of five lines per barangay. Cost per barangay is now down to $49,250 and cost per line is $4,925 per line. That Lucent agreed to this large cut seems to indicate the original contract has a lot of fat to give.

Perhaps, US Attorney General Janet Reno will be interested to look into this case for possible violation of the strict US Foreign Corrupt Practices Act. Except that the contract may have been signed by a foreign subsidiary of Lucent, a way of going around the US law.

The next contract is with Alcatel, signed March 30, 1998. Contract price is $55,274,066.33 for 344 barangays at five lines per barangay. The cost per barangay is $165,866.07 or a highly scandalous $33,173.21 per line.

This was renegotiated Nov. 10, 1999 to cover 1,202 barangays for a new cost of $57,057,928.65. From five lines per barangay, we now have 10 for a cost of $47,469.16 per barangay or $4,747 per line. The new contract also threw in five-year repair and maintenance, five-year spares and no local portion to finance.

There are other contracts funded by the US AID, the French Ex-Im and the Canadian International Development Agency. In other words, bilateral aid agencies and ex-im banks financed the overpriced contracts, including the inflated costs per line of from $14 to $32 thousand. They were effectively parties to the crime, a misuse of the money of American, Canadian and French taxpayers. Foreign aid funds were used to corrupt our officials.

Sen. Osmeña laments that the worse part of the barangay phone project is that many of these public calling stations don't even work. He cited the figure of 30 percent as being functional. In fact, when government tried to transfer some of these PCOs to the private sector, there was difficulty effecting the transfer because of the inflated costs and the non-functioning state of the systems.

It is a mystery why the Ombudsman has not yet sniffed this whole stinking mess. Sen. Osmeña says the Senate Blue Ribbon committee will likely look into the scandal. In the meantime, it is just as well that the Estrada administration stays away from it. The barangays in the hinterlands won't miss the phones anyway. A telephone is the least of their worries. Even without the outrageous overpricing, government can better use its money for textbooks or farm-to-market roads.

We received this e-mail from STAR reader Rafael E. Rodriguez, MD. We second his concern and call to action.

Add to the urgent tasks of ERAP: Clean the air, get your act together! I'm sure you have read the latest report of DOH. The morbidity rate due to Chronic Obstructive Pulmonary Disease (COPD) is on the rise, mainly due to air pollution and smoking. Not surprisingly, I don't see the MMDA or the DOTC jumping on their feet and making certain that those dilapidated jurassic buses on Edsa stop spewing smoke on our faces. Are we just so deadened and complacent, as you say -- third world mentality? Maybe we need Gen. Lacson to step in and deliver!

Here is Ernie Espiritu's contribution for today.

A couple of friends were playing a round in a rather remote course in the tropics of North Australia. After several holes, one needed to relieve himself, so he walked into the rough and began to pee.

Alas, as he was in mid-flow, an enormous snake slid up and bit his thing. The man screamed for help, and when his friend came, he told him what happened and asked him to get help.

His friend ran back to the clubhouse, saw the doctor, and asked what could be done. The doctor told him that to treat snake-bites you make a small cut where the bite is, then suck until all the poison comes out.

After thanking the doctor, the man ran back to his friend. When the man returned, his friend asked "What did the doctor say?" The man replied "You're going to die."

(Boo Chanco's e-mail address is [email protected])